A personal "behind the scenes" insight from the perspectives of CEO-wife and COO-husband power team into what its like to be a family owned and operated small business called EBSCO Spring Company. www.ebscospring.com

EPS Ebsco Production System

The Toyota Way

I have been reading the book pictured here “The Toyota Way” by Jeffrey K. Liker (McGraw Hill 2004).

Professor Jeffrey Liker teaches Industrial and Operations Engineering at the University of Michigan. Liker has been involved in analyzing Toyota since 1982. He has spent a great deal of time at Toyota and developed a relationship and access to the company that is unparalleled. In his book, Professor Liker looks at the underlying culture that drives Toyota’s TPS (Toyota Production System), the basis of Lean and so many other production systems and theories.

According to Dr. Liker, the point is NOT lean. Lean is simply a byproduct of Toyota’s DNA. Toyota’s DNA, directly links to the principles of the founding Toyoda family. When they developed TPS it was not intended to be a system. It was simply Toyota, reacting to obstacles that threatened the company. Toyota met the challenges head on and created new methods and philosophies to overcome. It was years later they published their system to pass on to suppliers and global partners that went on to become the driving philosophy behind manufacturing today. Too many companies focus on the steps for lean production directly as an answer to their obstacles, while the underlying character and culture of the company hold the answers. Lean in itself is not an answer. I do not believe Professor Liker is in any way diminishing the value of Lean. In fact he is a major proponent of Lean. His point is that lean requires a foundation or base. Without the proper foundation, the structure will fail. He presents TPS as a “system based on structure, not just a set of techniques”, At the base of the structure is “The Toyota Way Philosophy”. In the center of the structure is continuous improvement, waste reduction and people. Without the foundation and the central core supporting the pillars (the techniques) the house collapses.

Professor Liker talks about the Toyota DNA. He states the company carries on the core values of the founding family. Management seeks long-term answers and avoids short-term gains. Developing and empowering people are the keys to success. After WWII Japan’s economy was in ruins and cash had little value. There was plenty demand for Toyota trucks, but little money to pay for them. Kiichiro Toyoda, Toyota’s CEO had trouble paying employees as most companies in Japan. Wages were cut by 10% and 1,600 workers were asked to “retire” voluntarily. This led to work stoppages at Toyota which were common in Japan at the time. Kiichiro Toyoda took personal responsibility, even though everyone knew events were beyond his control. He resigned as President of Toyota. His personal actions helped quell worker’s dissatisfaction and put Toyota back on the assembly line. This is part of the Toyota DNA. Kiichiro felt he had let his employees down and sacrificed himself. Since I have the honor of being married to the CEO of Ebsco, I have unique insight into her core values of Ebsco. I remember in 2009 during the recession. The manufacturing industry was hit very hard and Ebsco suffered it’s share. Management took a salary reduction. Sales were down, some months up to 50%. When Cheryl came home from work I never heard her talk about her pay reduction or her future. What kept her up at night was fear for the employees future. She constantly talked about all of the people who were counting on her for a job. Her concern was for the team, not herself. This has always driven Cheryl. She looks at Ebsco as what it offers the employees, her family. She looks at Ebsco as a group of people who count on Ebsco for their futures and families and takes that responsibility very personally. Waste reduction is one of the three elements in our central core. Ebsco tackles this daily. We address it not by engineers or management reviewing KPIs (yes we do look at these also) but by empowering our team to question everything. I have repeatedly retold a story at Ebsco about a manufacturing company in England. A consultant at the company asked about a column on a production report that workers checked NO daily, (The heading at the top of the paper was gone) The workers replied they didn’t know what it was for but knew to put NO down every day. One day the consultant found the original form with the heading still in tact. The company had been around pre WWII. The column said AIR RAID YES/NO. Obviously this had meaning during the Battle for Brittain but workers continued the practice today, just because that’s what they always did. (SOURCE BusinessBalls.com) We take nothing for granted at Ebsco. We ask why on everything, but most importantly is who asks. EVERYONE asks. Those doing the job know what has value to the customer and what is waste. They are our source for eliminating the waste. At Toyota they challenge everything. It is part of their DNA. The key is EVERYONE challenges everything. It’s in Ebsco’s DNA also. The second item in our supporting core is continual improvement. This is actually written into my job description as a responsibility. I am evaluated on continuous improvement at Ebsco. If you have followed my Blogs you know where Ebsco is on that. Baby steps… One Million at a time. We’re changing many things at the same time. Is change actually improvement? In The Toyota Way, Cho Toyoda, Toyota president in 2002 is quoted, “There are many things one doesn’t understand and therefore, we ask them why don’t yu just go ahead and take action; try to do something? You realize how little you know and you face your own failure and you can simply correct those failures and do it again and at the second trial you realize another mistake or another thing you didn’t like so you can redo it once again. So by constant improvement, or, should I say, the improvement based upon action, one can rise to the higher level of practice and knowledge.” At Ebsco we encourage everyone to try, mistakes are not “got yous” but opportunities to learn. I think Nike’s “Just Do It” applies at Ebsco. The third item in our core is people. My management philosophy is “It’s People Stupid”. That’s it. Nothing else to say. Without people nothing happens. Our commitment to our team is in our Mission Statement. At Ebsco we learned that management doesn’t have the answers. Management has the questions and the team has the answers. In lean you talk about elimination of waste, anything that doesn’t add value. The team adds value, management supports the team. In any other capacity management becomes a source of waste, which I am sorry to say is the case at many companies.

So what about the Ebsco Production System compared to Toyota’s TPS? We’re not there yet but isn’t that the key. It’s impossible to even define where there is. There is no final destination for Toyota or Ebsco, both under a constant form of improvement driven from the employees within. Beyond the TPS, Ebsco values fun in the workplace as an additional important element. The keys are in the right position. Like everything else, hold on for the ride, it’s going to be fun.